The prospect of a rival takeover offer emerging for oil and gas explorer
Acer Energy
is now “unlikely" after original bidder
Drillsearch Energy
raised its stake in the target to more than 40 per cent, Drillsearch chairman
Jim McKerlie
says.

Drillsearch secured acceptances of its offer from Republic Investment Management and the Wecker Family Super Fund, to take it over the 40 per cent threshold that triggers an increase in the offer price to 28.5¢ from 25.5¢.

Acer was all set on Thursday to announce a potential rival offer when Drillsearch upped its all-cash on-market offer by 12 per cent.

Acer said on Friday that in light of Republic’s acceptance of the revised offer “it is unlikely that the alternative proposal in the form that was being proposed will be progressed further".

It still urged shareholders to take no action on the revised offer until the board had formed a view on whether it was in shareholders’ best interests.

A rival offer is still possible in theory, but any competing bidder would now have a much harder task to win control of Acer. The company owns wet gas and oil assets in the western part of the Cooper Basin, as well as tight gas assets that offer longer-term potential.

Republic was Acer’s largest shareholder, but sold a 19 per cent stake to Drillsearch as part of its original offer, then accepted the bid for its remaining 87.1 million shares yesterday.

“We are encouraged by Republic’s acceptance into the offer and encourage Acer shareholders to accept our offer now," Mr McKerlie said. “We believe the prospect of an alternative offer emerging is now unlikely given these developments."